App for Spotting and Disputing Dubious Charges

By ANN CARRNS

April 17, 2014

XAVIER PLASENCIA knows he should check his credit card and bank account transactions regularly to spot any questionable charges.

But like many people, he doesn’t always follow through. “It just seems like a tedious process,” said Mr. Plasencia, 26, an assistant manager at a wireless store in Buffalo, Minn.

So Mr. Plasencia recently started using a mobile app called BillGuard, to help track activity on his accounts. The app tries to make it simpler to view credit and debit card transactions, by compiling them in one place. If you recognize a purchase, you verify it by swiping the screen of your phone; if it’s questionable, you can click to send an email to the merchant, asking for more information, or to request that the charge be removed.

Other services, like Mint.com, also let you view multiple accounts in one location, with the goal of helping users budget their spending.

BillGuard focuses on helping you quickly spot possibly suspect transactions. Yaron Samid, BillGuard’s founder, says that while banks monitor customer accounts, much fraud is spotted by consumers after charges post to their accounts. BillGuard has helped users identify more than $1 million in fraudulent transactions since last year’s data breach at Target, Mr. Samid said.

(He said the tool had 500,000 registered iPhone users; its full version for Android phones will be available in early May.)

BillGuard also can help alert you to what it calls “gray” charges — ones that are sneaky, rather than outright fraudulent. Such charges might be for services — say, credit monitoring or a subscription — that you thought you were trying out, free of charge; you learn otherwise when a monthly fee appears.

The app does this in part through crowdsourcing, gathering information from its own users about problem merchants. It then flags transactions from those merchants when they appear on your accounts.

Mr. Plasencia said he reviewed transactions every couple of days using BillGuard. The app hasn’t yet found any fraudulent charges on his cards, but it did help him spot a monthly fee that he didn’t realize he was being charged by his bank. He might have noticed the fee eventually, but the app helped him catch it quickly; he was able to switch to a different type of account to avoid the fee.

Al Pascual, senior analyst for security, risk and fraud at Javelin Strategy & Research, said in an email that tools like BillGuard could cut down on the virtual legwork needed to monitor multiple accounts. But as with other tools that aggregate financial accounts, you must be comfortable sharing your account passwords to register cards with BillGuard.

The company says it encrypts personal information and uses Yodlee, which works with many big banks, to verify credentials; BillGuard doesn’t store them. The app obtains “read only” access to your transaction descriptions and amounts; it cannot move money into or out of the accounts.

Still, Paul Stephens, director of policy and advocacy at the nonprofit Privacy Rights Clearinghouse, which advises consumers about fraud and identity theft, counsels caution. Given the prevalence of data breaches, you must weigh any benefit from using a service like BillGuard against the potential risk of sharing login credentials with an additional business: “The fewer entities that have your information, in my view, the safer you are,” he said.

Here are some questions about using BillGuard:

■ What if I’m uncomfortable sharing my login information?

Mr. Pascual of Javelin suggests that you use tools offered by your own bank and credit card companies, like text or email alerts that notify you about transactions. That can help you track charges without logging on to each account — although you should still do that periodically. It’s crucial to monitor your debit card charges, Mr. Stephens said, since unlike credit cards, debit transactions deduct cash directly from your bank account.

The Privacy Rights Clearinghouse recommends that you limit the use of debit cards and use credit cards when possible, because of the generally stronger consumer protections available with credit cards.

■ Is there a fee for using BillGuard?

The app is free (it once charged to register more than two cards but no longer does so). BillGuard aims eventually to earn fees from merchants for its dispute resolution and related services, Mr. Samid said.

■ What if I want to complain about a “gray” charge on my account?

If the merchant won’t remove the charge, you can contact your bank or credit card company directly. You can also lodge a complaint with the Consumer Financial Protection Bureau, which has taken action against several credit card companies for using deceptive practices to enroll consumers in products they didn’t want.